Riot Games, the developer of hit video games such as League of Legends and Valorant, announced on Monday, January 22, 2024 that the company is cutting approximately 530 jobs worldwide, representing approximately 11% of its workforce. The company also decided to shut down Riot Forge, a game publishing label based on the League of Legends universe. These measures aim to refocus Riot Games' strategy on its core games and reduce costs, which have increased unsustainably in recent years.
Riot Games is a subsidiary of Chinese video game giant Tencent, which bought it in 2011 after it won the licensing rights to League of Legends in mainland China. Abbreviated as LOL, this game has become a cultural phenomenon and allows users to compete as a team in an online arena where each team must destroy the opponent's base. Riot Games has long relied on the massive success of this game, which has led to calls for it to diversify its business. In 2019, co-founder and president Marc Merrill told CNN that the company would finally launch a number of new titles. But since then, the company may have thought too big.
In fact, Riot Games CEO A. Dylan Jadeja stated in a letter addressed to employees and published that the layoffs were a necessity and not intended to satisfy shareholders. He acknowledged that the company has made a number of big bets since 2019 by expanding its games portfolio, expanding its global presence and recruiting new talent. However, these bets did not pay off as expected, and some of the company's significant investments did not bring the value that players expected.
According to Jadeja, one of the things Riot Games will do is reduce the size of the team behind Legends of Runeterra, an online card game whose development costs were subsidized by our other games. The company will also close Riot Forge, a publishing label that worked in collaboration with outside studios to develop new games from the world of League of Legends. “While we are proud of what we have created in this space and are grateful to the Forge team and our external partners who made these games possible, we do not see this as essential to our future strategy,” he said. he added.
Laid-off employees will receive at least six months' salary, cash bonuses and other benefits and support. The company also asked all employees to cancel their meetings for the coming week and work from home if possible to give them time to process the situation.
A. Dylan Jadeja's words to the staff
rioters,
Today I'm sharing with you a decision we hoped we'd never have to make at Riot. We are changing some of the decisions we make and changing the way we work within the company to focus on a more sustainable future. This decision means we will cut approximately 530 jobs globally, representing approximately 11% of our workforce, with the greatest impact occurring at the team level outside of core development. This also means we will be saying goodbye to many talented colleagues and friends across all areas of Riot.
I am aware that this is terrible news and particularly difficult for those who will leave us. To all the fired rioters, we are deeply sorry that it has come to this.
As CEO, I am responsible for the changes we make and the direction we take for the future. That's why I think it's important that I explain to you how we got here and how the next few days will unfold.
How we got here
Since 2019, we've made a number of major bets across the company with the goal of improving players' lives. We jumped into creating new experiences and expanding our portfolio with both feet and quickly evolved into a multi-game, multi-experience company – expanding our global footprint, changing our operating model, hiring new talent, the matched our ambitions, and ultimately saw Riot double in size in just a few years.
Today we are a company that is not focused enough and to put it simply: we have too much going on. Some of the significant investments we have made are not paying off as hoped. Our costs have increased to the point where they are no longer sustainable, and we no longer have room for experimentation or failure – which is crucial for a creative company like ours. All of this endangers the core of our business.
Over the past few months we have tried to change our trajectory in a number of ways. We asked leaders to compromise in the areas their teams are working on. We have taken measures to slow and, in some cases, stop hiring. We focused on cost control while strengthening our revenue growth. All of this was undoubtedly difficult for our teams.
But when I met with Riot leadership, it became clear to all of us that these changes are not enough. We need to focus more of our activities and efforts on the things that generate the most value for players – the things that are truly worth players experiencing. Unfortunately, this means changes in the area we invest most in: our workforce.
I want to make one thing very clear: this is absolutely the last thing we wanted to do. Such a decision has a significant impact on people's lives and Riot's culture. We're not making this decision to appease shareholders or achieve a certain number of quarterly profits – we've made this decision because it's a necessity. We made this decision because it is a necessity. This is what we have to do to keep players interested in the long term.
The consequences for the players
Following this email to employees, Riot Games CEO Dylan Jadeja and co-founder Marc Merrill issued a statement to players describing the situation, the impact on employees, and the impact on board games.
The post shows a commitment to the company's flagship live games (League of Legends, Valorant, Teamfight Tactics and Wild Rift) and highlights that Project L is making great progress. Unfortunately, she admits that Riot Forge will end after the release of Bandle Tale: A League of Legends Story. As for Legends of Runeterra, the game cost significantly more to develop and support than it did to make. As a result, the team size will be reduced and efforts will be focused on The Path of Champions.
Riot agreed to pay its employees $10 million to settle the gender discrimination lawsuit
In 2019, Riot pledged to pay $10 million to most of the women who have worked for the company since 2014 to settle a class-action lawsuit on behalf of those employees who claim the company's culture leads to systematic sexual discrimination. In August 2019, Riot announced this out-of-court settlement regarding widespread allegations of sexual harassment, discrimination and unequal pay within the company. However, a settlement proposal document filed in December of that year provided further details about the settlement.
In November 2018, Riot Games was sued by employees Melanie McCracken and Jessica Negron, who alleged violations of California's Equal Pay Act and the company's discriminatory and sexual harassment practices, the Los Angeles Times reported. According to the daily, the plaintiffs claim that many women who worked at Riot Games for several years did not receive equal compensation and had their careers restricted. The lawsuit followed a detailed investigation by Kotaku, a blog specializing in video game publishing, into the alleged culture of bias against women at Riot Games.
The settlement document, which also summarizes the arguments against Riot, accuses the company of paying women in similar situations less than men, placing women in lower-paying jobs, giving women promotions over similarly situated men, and Create, promote and maintain a work environment in which female employees are subject to discrimination, harassment and retaliation based on their gender.
Under the proposed settlement submitted to the judge for approval, all Riot employees and former employees who have worked at the company since November 2014 would be eligible for compensation, or about 1,000 women. Those employees would split about $6.2 million, after accounting for other costs, including legal fees, which must collect about a third of the settlement ($3.3 million). That means most of the group's participants will receive at least $5,000, according to court documents, with specific payments based on each employee's length of service over five years and employment status.
Diploma
Riot Games isn't the only company in the technology and media sector making headcount cuts. More than 5,500 layoffs were announced at Google, Amazon, Discord and other leading tech employers in the first two weeks of 2024. Among them, 500 employees were laid off from Twitch, Amazon's video game streaming platform.
Sources: Letter from Riot Games to Players, Letter from Riot Games to Employees
And you ?
What do you think of Riot Games' decision to lay off 11% of its employees and close Riot Forge?
What do you think of the compensation offered to departing employees (at least six months of salary, annual performance bonuses, health benefits, an additional $1,000 to cover certain expenses, ability to retain stock in the company, ability to get a laptop after returning your work computer to request). , etc.)?
Do you think Riot Games thought too much when it wanted to diversify its business beyond League of Legends?
What impact will these layoffs have on the video game industry and gamers?
How can Riot Games regain focus and profitability?
What are your favorite Riot Games games or which ones are you most excited about?
See also:
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Riot Games, the maker of the popular online multiplayer game League of Legends, says it will not pay a ransom after the game's source code was stolen by hackers
Windows 11: Riot Games' anti-cheat software requires TPM and Secure Boot. Trying to play Valorant without TPM2.0 would result in error VAN9001
What do you think of Riot Games' decision to lay off 11% of its employees and close Riot Forge?
